In 2014, Starbucks made headlines when it partnered with Arizona State University to offer its employees tuition reimbursement for its online courses, allowing them to finish their college degrees. Walmart, too, added nearly free college tuition as an employee perk, and a lot of companies offer at least some help to workers looking to further their educations.
On Tuesday, Discover Financial Services (NYSE:DFS) became the latest company to go all in on offering employees a way to get their degrees for free. Called "The Discover College Commitment," the plan will cover tuition, fees, books, and even supplies for some online degrees at the University of Florida (via UF Online), Wilmington University, and Brandman University.
What is Discover doing?
Discover has partnered with Guild Education, which will be managing the free college program. Guild will also offer employees academic counseling and help in finding the right program.
The College Commitment plan covers degrees in business management, business administration, software design and development, and computer and network security. Discover also will continue to offer its existing tuition reimbursement benefit for degrees and programs not covered by the new plan. In addition, it will maintain its "Leadership Education Advancement Program (LEAP)" program, which "provides select employees the opportunity to earn a bachelor's degree while focusing on leadership development through academic coursework," according to a press release.
All full- and some part-time employees will be eligible for College Commitment on their first day of employment.
Why is Discover doing this?
According to the company, 90% of its employees who don't have college degrees work in its call centers. Offering free tuition should help the company attract better, more ambitious workers for those jobs -- and, just as important, retain them, as the employees will be less likely to leave while they are in the midst of getting their educations. Longer term, it will give Discover a well-educated pool of internal candidates for promotion.
Given that the official unemployment rate in the U.S. is now at record lows, it makes sense for Discover (or really, any company) to offer perks that help it stand out to job seekers, and endear it to established employees. Both of those things will become increasingly important if the U.S. labor pool continues to shrink.
"Discover's meaningful investment in employees is incredibly rare and generous," said Guild Education CEO Rachel Carlson in the press release announcing the program. "We hope Discover's bachelor's degree program will lead the way for other financial services companies to follow suit, offering affordable and accessible higher education options for working adults."
This is a growing trend
With the cost of college continuing to rise, companies that offer their employees a path to a debt-free degree are going to look very attractive to people who want an education, but would rather not spend the next 20 or 30 years paying for it. Certainly, those businesses will appeal to people wary of joining the 44 million or so Americans who currently owe a total of $1.48 trillion in student loan debt.
Discover may be on the leading edge of a wave of companies adding some form of free college to their benefits packages. But until this perk becomes common, the financial institution gains a smart recruiting edge by offering it.